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M'sia Is in Another FOREX Pickle (Bloomberg)
By David DeRosa
12/4/2001 10:56 pm Thu
[Dulu bolehlah Mahathir ketawa mengenakan kawalan matawang
kerana nilai ringgit agak padan. Sekarang seluruh dunia dilanda
gelombang kemelesetan sehingga Amerika dan Jepun sendiri pun bergoyang.
Inilah dua negara penting yang menyerap ekspot Malaysia khususnya
dalam bidang elektronik. Mereka tentunya kurang berminat untuk
mengimpot barangan dari Malaysia kini kerana ringgit sudah terlalu tinggi
berbanding matawang serantau yang melemah berikutan kejatuhan yen akibat
kemelut ekonomi dan ketidak tentuan politik di Jepun.
Menurut Derosa, Yen dijangka merosot lagi berikutan polisi kewangan
baru 'pelegaan kuantitatif' (pengembangan sengaja pengeluaran wang asas)
kerajaan Jepun. Jika ia jatuh keparas yang cukup lemah Mahathir akan
lingkup, atau 'terpaksa memakan burung gagak sahaja', perli Derosa.
Ini adalah kerana semua pembeli akan tertumpu ke Jepun kerana lebih untung.
Pelabur sudah tidak berminat lagi untuk mendekati Malaysia kerana
Mahathir suka menukar polisi secara tiba-tiba bila terdesak sehingga
Walaupun Malaysia mungkin tidak berbuat apa-apa terhadap ringgit, ia
akan tergugat juga kerana permintaan seluruh dunia sudahpun merosot.
Kita perlu bergantung kepada simpanan yang ada - malangnya ia cuma tinggal
untuk beberapa bulan sahaja........ inilah satu malapetaka yang bakal
menjerut negara jika Mahathir terus dengan kedegilannya. Bila ini
berlaku kehebatan KLIA dan ketinggian menara Petronas di KLCC pun tidak
akan dapat menolong apa-apa. Malah mungkin tiada sesiapa pun yang mahu
membelinya ... atau tergadai sahaja.
By David DeRosa
New Canaan, Connecticut, April 11 (Bloomberg) -- Malaysia is
foreign exchange's problem child. It is now becoming clear that
the nation's currency, the ringgit, is overvalued relative to the
dollar and to other Asian currencies. Yet proud Malaysia resists
any talk of devaluing the ringgit or letting its value be set by
As a consequence, the country's high-tech exporters are
beginning to suffer. What is happening now is that Malaysia has
begun to reap the bad consequences of having a pegged exchange
More than two years ago, irascible Malaysian Prime Minister
Mahathir Bin Mohamad slapped a ban on all trading in the ringgit,
restricted the movement of capital out of the country, and pegged
the currency at 3.8 ringgit to the dollar. All of this was in
response to the Southeast Asian currency crisis that erupted when
neighboring Thailand was forced to float its currency in July
But note that Mahathir's decision to peg the ringgit did not
come until 14 months after the flashpoint of the crisis. And for a
while, his sense of timing appeared inspired because the other
currencies in the region, and the Japanese yen, rebounded.
Malaysia, having in effect created a competitive devaluation
of the ringgit, saw its exports flourish.
The problem now for Malaysia is that all Southeast Asian
currencies have been on the skids since January 2000. In the past
15 months, the Thai baht has fallen 19 percent against the dollar
and the Indonesian rupiah by 34 percent. Even the yen has fallen,
by 17 percent.
Worse yet, the framework of Japan's new monetary policy,
announced last month, features ``quantitative easing,'' meaning
the deliberate expansion of the base money supply. If this is
aggressively pursued, the yen will weaken further. Many traders
think that levels of 130 or even 140 yen to the dollar are
possible by the end of this year.
Mahathir, by declaring an end to trading in Malaysia's
currency, probably thought that he had rid himself of the foreign-
exchange market once and for all. Yet that is like medieval
England's King Canute trying to command the waves to stop before
Even with capital controls and pegged exchange rates,
currency trading effectively happens as long as a country exports
and imports goods and services.
If the forecasts for a lower yen materialize, and thus make
Japanese exports relatively less expensive, Malaysia's export
industries will be at a competitive disadvantage.
On top of that, global demand for goods and services is
slipping, even without Malaysia's currency problem. It is no
secret that the large economies are slowing. This is true in the
U.S. as well as in Asia and Europe.
Float or Peg Hard
So what should Malaysia do about its exchange rate? Malaysia
could keep its peg, only at a different rate. This is what Finance
Minister Daim Zainuddin seems to want, as he said last week that
``for the sake of predictability and certainty, the peg will
This is not going to solve Malaysia's other problem: The
country is a pariah in world markets because of its arbitrary
impositions of capital controls.
The effects of Mahathir's actions in 1998 are now being felt.
Malaysian debt and equity offerings are getting cool receptions in
world capital markets. Why buy Malaysian assets, investors say to
themselves, when Mahathir could make another arbitrary move, such
as freezing foreign investments? Once burned, twice shy.
The solution is that Malaysia must announce a totally new
policy on foreign exchange. It must swear never to reinstitute
capital controls. Then it must de-peg the ringgit.
As for choosing foreign-exchange regime, either Malaysia must
institute a currency board to fix the rate after first allowing
the ringgit to find its true market value, or it must commit to
letting the ringgit float forever.
Of course, any of these steps would constitute a complete reversal of Mahathir's former draconian foreign-exchange policies. Too bad. If the yen falls far enough, the foreign-exchange market is going to make Mahathir eat crow.